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Ever since billionaire Elon Musk’s takeover of Twitter in October, an impending sense of doom has been hovering over the social media platform and its customers.
From issuing an ultimatum to his (remaining) staff to launching a paid verification characteristic which majorly backfired on him, Musk is sending an already dying social media platform to its grave.
Before Musk’s acquisition of Twitter, the social media platform incurred a web debt of US$596.50 million final yr, in accordance with the Wall Street Journal, and was struggling to draw new customers in addition to enhance its income.
The firm had not turned a revenue for eight out of the previous 10 years.
Post acquisition, though it’s harder to find out the monetary well being of Twitter as Musk has privatised the social media firm, analysts have pieced collectively an evaluation from the corporate’s final regulatory filings and Musks’ public statements to search out that the online debt Twitter has accrued snowballed to a whopping sum of US$13 billion.
In addition, the corporate, which generates over 90 per cent of its income from promoting, is seeing large advertisers akin to WPP’s Group M and Omnicom fleeing, and pausing their spending on the social media platform as there’s a rising concern in the direction of the longer term enterprise mannequin of Twitter.
There is not any denying that the social media platform was on its technique to its grave — its monetary efficiency itself is proof of this — and Musk simply accelerated its dying by way of his reckless strikes and hasty selections.
Users are fleeing the social media platform
Big advertisers apart, Twitter’s customers are additionally fleeing the platform.
According to MIT Technology Review, the platform Bot Sentinel — which tracks inauthentic behaviour on Twitter — believes that round 877,000 accounts had been deactivated and an extra 497,000 had been suspended between Musk’s takeover of Twitter in finish October and November 1, which is greater than double the common variety of accounts.
Celebrities akin to Gigi Hadid and Shonda Rhimes have additionally bowed out of Twitter, citing that Musk’s takeover has solely created a “cesspool of hate and bigotry”, which is true contemplating that Twitter noticed a virtually 500 per cent enhance in use of the racial slurs inside 12 hours of Musk’s takeover.
But what’s fascinating is that the customers who’ve stop Twitter didn’t simply lay off social media — they’ve turned to various platforms, which reported large will increase of their person bases since Musk’s takeover.
Alternative Twitter platforms are seeing a surge in customers
According to Fox Business, many of the smaller platforms which noticed a surge in customers share widespread parts, particularly the absence of adverts and algorithms.
One such platform is Hive Social, which has garnered over two million customers since Musk’s Twitter takeover. The skyrocket of recent customers even led to the platform crashing a few occasions.
Hive Social combines ideas from Instagram, Twitter, and MySpace, together with picture and video posts, standing updates, an choice to repost content material, and even allows customers to have a personalised music part on their profiles.
While the app remains to be removed from good and has its fair proportion of bugs, Hive Social has managed to develop its funding as properly, with greater than 800 folks investing over US$300,000 into the app by way of crowdfunding web site WeFunder.
The further funding that Hive Social has obtained will likely be put in the direction of amping up accessibility and pushing out weekly growth updates to the app to accommodate customers’ suggestions, in accordance with the app’s 24-year-old CEO Raluca Pop.
Besides Hive Social, decentralised social media platform Mastodon can also be trending amongst ex-Twitter customers and companies alike.
According to SensorTower, the platform noticed its downloads develop by 657 per cent within the 12 days following Musk’s possession of Twitter.
Mastodon has been round since 2016, and is powered by a community of impartial servers worldwide. The platform is much like Twitter within the sense that they’re each microblogging platforms — a person can publish posts which go right into a central feed, which will be “starred” (preferred), “boosted” (retweeted), and shared.
Alongside common customers, companies and tech giants akin to Volkswagen AG and Google have arrange their official accounts on Mastodon as properly.
In addition to the explosion in downloads of those new platforms, present social media platform akin to Tumblr additionally noticed its adoption surge by 96 per cent within the US, and by 77 per cent worldwide.
With all these new platforms gaining traction, how precisely can Musk’s Twitter survive?
Musk’s MySpace second
I can draw parallels between the dying of one of many greatest social media websites, MySpace and Twitter.
MySpace fell from its grace because of the platform falling into unhealthy palms within the face good opponents akin to Facebook — does this sound acquainted?
Twitter is already lagging behind different social media giants, sitting in fifteenth place by variety of customers, and has been overtaken by new entrants akin to TikTok. Musk’s hostile administration type solely dug a deeper gap for the platform.
Running Twitter like an authoritarian regime, Musk slashed the social media platform’s workforce of seven,500 by half in a determined try to cut back Twitter’s prices.
Although Twitter’s layoff can assist the corporate save over US$860 million a yr, an approximate 15 per cent of Twitter’s US$5.57 billion in prices and bills final yr, this transfer can even show to be lethal to the social media platform — the corporate’s most important engineers, builders and entrepreneurs have left Twitter.
The mixture of those components in addition to the rise of social media platforms rivalling Twitter can solely imply one factor: the platform is heading for its downfall.
Is chapter the one manner out?
On November 10, Musk warned a few potential chapter in an all-hands assembly with Twitter’s employees, in accordance with folks aware of the matter. This comes sizzling on the heels of an inside memo to staff by which Musk cautioned them of “dire economic challenges facing the company”.
While it’s simple that Twitter is going through a barrage of challenges and most certainly heading in the direction of a downfall, analysts nonetheless imagine that Musk can search out different choices earlier than resorting to file a chapter, in accordance with Wall Street Journal.
If Musk does find yourself submitting for chapter, his US$27 billion funding will most certainly be worn out as fairness holders would be the final to be paid out throughout an organization restructure.
Instead of dropping of his funding, Musk should purchase again Twitter’s debt from lenders at a steep low cost to cut back the corporate’s debt load and curiosity prices, in addition to its valuation, former credit score analyst and founding father of knowledge supplier Enersection LLC, Jeffrey Davies, advised Wall Street Journal.
This will find yourself being helpful for the corporate in the long term.
Besides that, in accordance with finance professor David Kass, Twitter might additionally exchange a few of its debt with fairness and if profitable, Twitter can generate optimistic free money move in two or three years.
It all lies on Musk’s plan of action. If the correct steps are taken on the proper time, perhaps Twitter will be saved.
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